The Solana Foundation has introduced a new open-source framework designed to let institutions settle trades on the blockchain in seconds rather than the one to two days typically required by traditional financial markets. JPMorgan provided settlement expertise during the framework’s development.

The nonprofit organization announced Solana DvP on Oct. 6. The delivery-versus-payment system is built to settle an asset and its corresponding payment in a single atomic on-chain transaction, giving institutions finality within seconds.

Traditional securities transactions often move through multiple intermediaries, including clearinghouses and custodians, before both sides are settled. That process can leave capital tied up for one to two days and creates principal risk if one party delivers while the other does not.

Solana DvP is intended to remove that gap. The asset transfer and payment are linked so that either both are completed or neither takes place. This prevents a counterparty from receiving one side of a transaction without delivering the other.

The system also addresses another challenge for institutional blockchain activity: the need to build customized settlement contracts for individual transactions. Solana DvP provides a common framework that institutions can use across the Solana ecosystem instead of relying on separate, one-off smart contracts.

Catherine Gu, head of product for Digital Assets at the Solana Foundation, said atomic settlement can remove counterparty risk associated with conventional finance. She said the DvP framework gives institutional participants an open standard on public infrastructure while enabling settlement finality in seconds rather than days.

The foundation argues that faster and more predictable settlement could lower the friction involved in moving value on-chain, potentially supporting wider use of tokenized assets.

Solana has already been involved in institutional tokenization activity. One example is a J.P. Morgan-arranged commercial paper transaction for Galaxy Digital that settled in USDC. A standardized DvP framework could make comparable transactions easier to execute repeatedly instead of requiring custom arrangements each time.

JPMorgan’s Settlement Input

JPMorgan contributed to the project by sharing expertise developed through decades of experience with financial settlement. Its input helped shape requirements involving transaction deadlines, escrow isolation and token controls used by regulated issuers.

Among the supported controls are pausable transfers and transfer hooks available through Solana’s Token-2022 standard. Pausable tokens provide an emergency mechanism that allows authorized administrators to halt transfers when required.

Rhodel D’souza, head of markets digital assets at J.P. Morgan, said institutional market participants need shared and open infrastructure that allows them to scale while limiting settlement risk and counterparty exposure. He said JPMorgan was pleased to contribute its settlement knowledge.

Existing Blockchain DvP Systems

Solana’s framework enters a market where other blockchain-based DvP systems are already being tested or deployed. Its main distinction is its open-standard approach on public infrastructure.

JPMorgan’s Kinexys has tested a cross-chain DvP transaction with Ondo Finance, connecting its permissioned payment infrastructure to the public Ondo Chain testnet.

ClearToken has pursued a different model, providing DvP settlement through fully permissioned and regulated applications built on the decentralized, privacy-enabled Canton Network.

The Solana Foundation said Solana DvP has undergone external security audits and is ready to support real funds. It also plans to add privacy features designed to keep settlement activity confidential.

Such privacy capabilities could be important for institutional adoption. At Consensus Hong Kong in February, institutional participants highlighted strong privacy protections as a key requirement for broader blockchain use among financial institutions.